The company's recent situation

The company announced a plan to issue additional shares to specific targets. It plans to issue no more than 21.28 million additional shares to Mr. Li Xin, the actual controller of the company, accounting for 15.14% of the total share capital before issuance. The proposed capital raised in this offering does not exceed 500 million yuan.

reviews

The company issues shares to raise capital for the construction of enterprise technology centers and marketing networks, and continuously upgrade the company's core competitiveness. The company plans to raise 500 million yuan, of which 280 million yuan will be used for the second phase of the enterprise technology center construction project, 150 million yuan for marketing outlets and product display center construction projects, and 70 million yuan to supplement working capital.

Strengthen basic R&D infrastructure such as testing and design, and further strengthen core basic technology. According to the company's fixed increase plan, the company plans to further build basic R&D laboratories for core products such as next-generation PLC, HMI, and drive systems, and carry out reliability and electromagnetic compatibility tests to provide basic support for product process design plans and parameters, and further enhance the company's new product development cycle and industrial control solution capabilities. In addition, the company is also further strengthening the layout of key technologies such as AMP technology, virtual simulation technology, and robot vision AI around core products.

The company is increasing sales network construction and improving service capabilities. The company continues to improve the coverage level of the company's sales network and strengthen the company's sales capacity by building new, upgrading offices, and building new sales teams. We believe that under the combined sales model of direct sale+distribution, the company is expected to continue to open up growth points.

The company further strengthened the layout of products such as large-scale PLCs, multi-core high-stability PLCs, and industry-type AI algorithm intelligent equipment.

The control of the company's actual controller has been further enhanced, demonstrating the company's confidence in development. Li Xin, the controlling shareholder and actual controller of the company, subscribed to this fixed increase. The actual controller Li Xin's holding ratio was about 23.1% before the issuance, and the holding ratio is expected to rise to 33.2% of the total share capital after issuance.

Profit forecasting and valuation

Maintaining the 2024/25 net profit forecast of 24/ 290 million yuan, the current stock price corresponds to the 2024/25 price-earnings ratio of 17.0/14.0x, maintaining the industry rating and target price of 40 yuan, corresponding to the 2024/25 price-earnings ratio of about 23.7x/19.4x. Compared with the current stock price, there is still room for 39.4% increase.

risks

Downstream demand fell short of expectations, and industry competition intensified.